Susan Gordon, Business Reporter

Scotiabank Jamaica made record profits of $6.8 billion in 2006. - File

Scotiabank Jamaica presi-dent, William Clarke, in an indica-tion he plans to continue setting records for profitability, says he plans to continue diversifying income streams at the century old commercial bank, and that his next target area for growth is the investment arm.

Bank of Nova Scotia Jamaica made net profit of $6.8 billion - $1.8 billion of which was recorded in the fourth quarter - for its 2006 year ended October 31, a 15.5 per cent boost on the year prior's $5.9 billion.

The stock traded at its 52-week high of $26 Monday before settling at $25.12. Yesterday, the stock closed at $25.30.

"This marks the 10th consecutive year of increased profits for Scotiabank," said a statement to shareholders quoting Clarke.

The result pushed earnings per share to $2.32 compared to 2005's $2.01.

Shareholders will also see higher dividend payouts by seven cents to $1.07 overall, when the interim 29 cent dividend approved by the board is paid January 8, the bank said Friday.

Core strengths

Its retail loan portfolio - consumer, mortgages and credit card - climbed by $5.4 billion or 30 per cent to $18 billion, which Scotiabank credited for its improved profit position.

"These strong results reflect Scotiabank's core strengths in risk management and cost control and our continued focus on customer satisfaction," said the bank in its statement to stockholders.

Non-performing loans, however, grew to $1.01 billion from $918 million in 2005, but remained under two per cent of total loans.

Clarke in his outlook to 2007 sees promise in both wealth management and the small and micro enterprise sector (SME), and is currently hunting a manager to head up the SME business unit.

"We are going to make a serious thrust in this area," he said.

Wealth management income

But it is the wealth management arm that he sees as offering the larger income flow, and the pending $5 billion to $6 billion acquisition of Dehring Bunting and Golding and its 23,000 customer base is his best opportunity to make it happen.

"Wealth management is our weakest link," Clarke told Wednesday Business, explaining again why he was going after an established firm instead of developing business under the Scotiabank brand.

"Building takes a long time. We are playing catch up," he said. "Acquisition takes less time."

Clarke was not ready to project what contribution the expanded wealth management division would make to profits in the year ahead, saying it was too early to estimate.

However, DB&G last grossed $4 billion and made a profit of $882 million in its financial year to March 2006 - or $640 million when stripped of extraordinary gain - a profit position the investment bank's team is expected to maintain under the conditions of the takeover.

pleasant surprise

Scotiabank's own revenues topped $27 billion - $2.8 billion of which was from fees and commissions - an increase of $2 billion year on year, while its total assets grew 9.0 per cent to $200 billion. Its capital base was also $4 billion stronger at $27.4 billion.

Marks 10 straight years of profit increases

BNS Ratios

2006

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EPS (2.927m shares)